Makkah Streetlight Project Supports Outlook


We have long highlighted the potential for solar energy usage in Saudi Arabia, based on the country's high ins o lation rate s and the alternative cost of using oil that could otherwise be exported. On the back of Saudi Arabia's white paper detailing the installation of 54.1 gigawatts (GW) of clean energy capacity by 2032, we have underscored the country's potential to become a regional outperformer. This view is now starting to play out.

Much Light At The End Of The Tunnel
Saudi Arabia - Solar Capacity

On March 13 2013, a project to power all streetlights in Makkah using only solar energy received a bid of US$796.6mn from a consortium comprising Rolls Royce and General Electric. According to the mayor of Makkah, Osama Al-Barr, the project will save the state treasury US$586.6mn over 20 years (on top of the indirect profit of diverting the domestic usage of oil towards more lucrative export markets). This will be the first project in Saudi using the technology of converting renewable energy into lighting, exploiting a(nother) resource they have an abundance of.

Saudi Arabia is already on track to launch a pilot programme with renewable energy-powered desalination plants. In October 2012, Abdul Rahman Al-Ibrahim, the governor of Saudi Arabia's Saline Water Conversion Corporation (SWCC) stated that three new solar-powered desalination plants were in the planning stage at Hagel, Dhuba and Farasan.

Big Market, Big Opportunities
Construction Industry Value (US$bn), Real Growth (%)

Hence, in a bid to diversify its electricity mix away from thermal sources, coupled with a strong political will towards a renewables agenda, we see big investments being channelled into the solar sector, and as a result, the wider construction industry. In line with both our industry outlooks (infrastructure and power), we are seeing ample opportunities building up, with the Saudi government ready to pay.

This article is tagged to:
Sector: Infrastructure
Geography: Saudi Arabia